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Microsoft needs to impress a lot of people with Windows 11

·Technology Editor
·5-min read

Wednesday, June 23, 2021

This article was first featured in Yahoo Finance Tech, a weekly newsletter highlighting our original content on the industry. Get it sent directly to your inbox every Wednesday by 4 p.m. ET. Subscribe

Windows 11 is coming, and it needs to be a hit with these groups

On Thursday, Microsoft (MSFT) will unveil the latest version of its all-important Windows operating system. Expected to be called Windows 11, it comes at a time of newfound importance for laptops and desktop computers — a time when many people are working from home.

Employees who began working remotely at the onset of the pandemic have snatched up PCs in the last year at an incredible clip, with IDC estimating that Q1 global shipments grew by 55.2% year-over-year to 84 million units. And the best-selling brands included Lenovo, Dell, and HP, all of which run on Windows.

That’s a good number of new and returning users Microsoft is going to have to impress, or at least not annoy, with its latest iteration of Windows. But Windows 11 is going to have to do more than just please your average customer.

The next-generation operating system will also have to recapture some of the share Microsoft lost in the education space from Google’s (GOOG, GOOGL) Chromebooks, win over developers to work with its Microsoft Store, and continue to push gaming as a main piece of its overall consumer strategy.

Microsoft needs to win back schools

It’s been nearly six years since Microsoft released Windows 10. And while consumers will welcome the new look and style of Windows 11, they mainly want an operating system that works.

“I would suspect, most consumers don't really care,” explained Vasant Dhar, professor of information systems at NYU’s Stern School of Business. “They just need an operating system that runs those basic things.”

That’s not the case for schools, though. Educators need inexpensive, secure systems they can set up easily. That’s where Google’s Chromebooks come in. Powered by Google’s Chrome OS, Chromebooks saw sales explode in 2020 as school systems looked for laptops they could pass off to students learning from home.

BOSTON, MA - AUGUST 21: Technology manager Juan DeJesus prepares Chromebook for students in the technology department at Boston Preparatory Charter School in Boston, MA on August 21, 2020. Boston's independently run charter schools are planning to start the school year remotely, although most intend to offer in-person learning for small groups of high needs students.  (Photo by Craig F. Walker/The Boston Globe via Getty Images)
Google's Chrome OS-powered Chromebooks have become the go-to computers for schools, stealing away market share from Microsoft. (Photo by Craig F. Walker/The Boston Globe via Getty Images)

According to Canalys, there were 30.7 million global Chromebook shipments last year, a 109% year-over-year increase versus 2019, many of which went to schools. According to IDC, as of Q1, 2021, Chrome-powered devices, including the desktops and laptops that run the operating system, captured 68.6% of the market share in the education settings.

Microsoft has tried to win back the sector with its own lightweight version of Windows called Windows 10 S, now called Windows 10 S mode — but it hasn’t caught on as well as Chromebooks.

According to a 2020 Grand View Research report, the global education technology market will be worth as much as $285.2 billion by 2027. If Microsoft wants a chunk of that pie, it needs to start with Windows 11 — and a new approach to education.

Developers will be key

The Microsoft Store is an “also ran” compared to the likes of Apple’s (AAPL) App Store or Google’s Play Store. But the company is putting more emphasis on its app marketplace to lure developers away from its biggest competitors.

During his keynote at the company’s Build conference last month, Microsoft CEO Satya Nadella said the company is making big changes to Windows for developers. “We will create more opportunity for every Windows developer today and welcome every creator who is looking for the most innovative, new, open platform to build and distribute and monetize applications,” Nadella said.

That last part could bring more developers to Microsoft’s own Windows Store platform. While Apple and Google have angered developers over their 30% app store revenue share, Microsoft has cut its revenue share for games from 30% to 12%. And since games make up the majority of sales on app stores, that’s a big deal.

But Microsoft will have to make its store as appealing to consumers as the App Store or Google Play. And since you can already install apps on PCs outside of the Microsoft Store without paying fees, Microsoft is going to have to break out the big guns if it’s going to convince developers to offer their products through the portal.

Unfortunately, while we’ve gotten a glimpse of a leaked version of Windows 11 thanks to The Verge’s Tom Warren, the same can’t be said of the Microsoft Store. That means we’ll have to wait until Thursday to find out if Microsoft has what it takes to turn its platform into one capable of taking on the leaders in the space.

Gamers need some love

Microsoft has leaned into gaming thanks to its Xbox Game Pass subscription service, which allows you to play roughly 100 games as much as you want across multiple devices.

And while the Xbox Series X and Series S are certainly important to the company’s gaming future, Windows PCs are still a major gaming platform for millions around the world. To that end, Microsoft is going to need to include updates that allow for improved gaming performance.

The company made major upgrades for gamers with the release of Windows 10, and with more gamers logging on to crash through the likes of “Fortnite” and “Call of Duty: Warzone,” Windows 11 will need to provide gamers with more benefits than ever before.

Now we just have to wait to see if the company can pull it off. Should be simple enough. Right?

By Daniel Howley, tech editor. Follow him at @DanielHowley

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